The House has introduced legislation to amend the Tax Code to modify the penalty on the understatement of taxpayer's liability by preparers.
The bill, H.R. 4318, was introduced by Joe Crowley, D-N.Y., and co-sponsored by Jim Ramstad, R-Minn. The bill fixes a provision added to emergency spending legislation passed by Congress in May. That provision, in the Small Business and Work Opportunities Tax Act of 2007, amended Section 6694 of the Tax Code and would have required a major change in how CPAs represent taxpayers by raising an IRS reporting standard for preparers to a level of certainty higher than taxpayers must meet, creating a potential conflict of interest between preparers and their clients. The IRS has delayed implementing the law.
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